Tom Nardacci’s 1 million-square-foot goal for the Capital Region

By Justin Dawes – Reporter
October 14, 2021, 05:22pm EDT

Tom Nardacci says the Capital Region needs to increase the level of flexible workspace from roughly 200,000 square feet to at least 1 million. And that’s just a start.

He thinks that’s one of the key actions the region can take to make the startup economy more successful.

“I still think we’re trailing way behind where we ought to be in terms of how we rank and how we compare to markets around the country,” Nardacci said. “And I think we’ve got to be honest about that. We’ve got to be honest about where we are today.”

Nardacci is the owner of the coworking spaces Troy Innovation Garage — the base for multiple startups that have gotten Business Review coverage lately — and Bull Moose Club in Albany. More recently, he opened the Westwey Club coworking space in Providence, Rhode Island. Nardacci earlier this year sold his PR firm, Gramercy Communications.

The Business Review spoke with Nardacci on his thoughts about flexible workspace and why the Capital Region needs more.

Why do you see coworking space as so important? There was a report from the Upstate Alliance for the Creative Economy that said one of the impetuses to growth of the creative economy is access to flexible workspace. It’s a real problem.

When I started my PR firm, I worked out of my house, then subleased a side office, then I signed a five-year lease. Two and a half years later, I grew out of it and had to break the lease. I wasted money on real estate, wasted money on rents. Everything I did at Troy Innovation Garage was born out of what I went through. If I had this, my life would have been so much easier as a startup.

What role do you see this having in the region? We need more. The flexible office space market is maybe a couple hundred thousand square feet right now. It should be a million square feet. That’s where heads are going to butt in terms of that old, blue-blooded Albany versus what’s actually needed to grow businesses here. It’s misaligned right now. There has to be some sort of disruption to figure out how to get to a million, which is still a sliver of what’s actually needed.

We have two 20-some-person companies in the Troy Innovation Garage that are bursting at the seams and they want to go into what’s next, but they’re not done growing. They want to go from 20 to 100, so they don’t want to sign a 10-year lease and get trapped. There’s some flexible space that needs to be provided for 10-40 employees, beyond just the 1-8-person spaces.

It’s real estate as a service. It has to be a service economy that supports startups: financing, real estate, and then other things that startups need to be successful, like education programming and training. It’s not just real estate for us. It’s community. We’re directly tied here to downtown Troy. Our members spend money downtown every day. A third of the people that work here walk, so they live here.

How do we shift toward such a big increase in coworking space? I pushed out this number, 1 million square feet, and it’s based on the percentage of the total market based on other markets. There has to be an agreement in the amount of square footage. And then I think the market can support a variety of ways to get there. I have done one way: I bought a building in downtown Troy, renovated it and turned it into Troy Innovation Garage. The other way is to lease space and work with a landlord who’s willing to understand the concept and make investments.

The other thing is, especially now, there’s a lot of vacant commercial inventory. So I think some of the more established real estate companies should take a hard look about doing something different and not live in the glory days. I think there’s some innovative thinking that can take place in that sector. And I think there are some non-real estate, bigger corporations that could do it. They could make investments and create flexible environments, and maybe as part of their flexible environment, they have space for supportive industries of their own.